We had one problem in one of ministries in the past, thank god he was removed or asked to resign.now we have another cool customer, who needs a lesson for his arrogant antics in front of the media.

i knew it would be very difficult to deal with the fellow when he was removed and put into this ministry from the previous one.

if there is a problem we need to resolve it in a professional way not like this drama by cpc, who is accountable for 85% of the problem. blaming and creating a panic situation in the country is not cricket.

this is simply done with ulterior motive in my opinion. if we look at his past conduct in same ministry we can know when the last foiled strike that made the president to make this as essential services he was on the opposite side.

can we get CPC quarterly financials or monthly financials of september 2017. i want to see from my own eyes the profit CPC earned.

what we have heard from the politicians was if LIOC can be profitable why CPC is unable to be making profits. i mean net profits.

so the news is that CPC has turned profitable and lioc incurring losses.

so if CPC has net profits then the lioc management can learn some new tricks from the old dog.

While saying that the current petrol crisis will be probed as to who caused it, Prime Minister Ranil Wickremesinghe said today he could not agree with the criticism heaped on the Lanka Indian Oil Company (LIOC) for the crisis.

The Prime Minister was referring to a statement made by Chief Opposition Whip Anura Kumara Dissanayake and joint opposition parliamentary group leader Dinesh Gunawardene who earlier said the petrol shortage would not have taken place if LIOC was not allowed to get involved in the fuel distribution of the country.

The Premier said the current crisis was probably caused by others and that it would be probed.

“The fuel supply was maintained to some extent during the recent strike action launched by petroleum workers, thanks to the LIOC," the Prime Minister said.

He said oil tanks in Trincomalee were given to LIOC because CPC was not able to make use of it for a long time due to the lack of financial resources.

"We inquired from India whether it was interested in investing in this and they agreed and an MOU was signed," the Prime Minister added.

Referring to the allegation that he sought Cabinet approval to acquire 10 oil tanks in Trincomalee of the Ceylon Petroleum Corporation (CPC) with another cabinet memorandum, the Prime Minister said the second memorandum which he submitted, only said that the government should look into the agreement before making a decision.

The Prime Minister said he and the President had already discussed with the Indian High Commissioner on getting another shipment of Petrol from India and that this would be in addition to the shipment due to arrive in Colombo tomorrow. (Yohan Perera and Ajith Siriwardana)

ECONOMYNET - Sri Lanka's state-run Ceylon Petroleum Corporation, a key trigger of economic instability in the country, has lost 68 billion rupees in the nine months to September 2017, amid mis-pricing of fuel, officials said.

CPC is now losing 11 rupees on a litre of petrol, 7 rupees on a litre of diesel and 25 rupees from kerosene, after paying turnover taxes.

Sri Lanka's government has still not made a decision on implementing a price formula, Petroleum Minister Arjuna Ranatunga said.

"The decision on pricing formula has to be taken by the government," Ranatunga told reporters. "Unfortunate thing is if we try to get a formula done, it will affect the masses," he claimed.

"In the future there can be a change. But at the moment we are not looking at it. I do not think it is the best time to do it, since the cost of living has gone up."

Energy however is used less by the poor, and mostly by the rich. Economists say 70 percent of the fuel sold in the country are consumed by the upper 30 percent of income earners in society, an economist said last week.

The consumption of either petrol, diesel or electricity goes up with income.

Central Bank Governor Indrajit Coomaraswamy said off-budget subsidies given by CPC and CEB has been a problem.

Losses of the CPC or Ceylon Electricity Board or both has also triggered balance of payments crises in the past when they were accommodated by central bank credit, when interest rates were not allowed to go up, with the rupee collapsing, pushing inflation up and hurting the poor most.

Later taxes collected from foods of the common people including from hospital bills, are used by the Treasury to subsidize CPC and CEB, whose customers included exporters who sell goods in countries with higher income levels.

CPC will never make profit in my opinion. We cant compare CPC with LIOC management.

There are lot of lazy people in Sri Lanka. And all they need is a government job. So they go behind and work for a politician, when that politician get elected and becomes a Minister he has to provide a job somewhere in his portfolio, whether there is a vacancy or not. Thats why no one properly works at government organisation.

In this country there are lot of intellects, professionals... majority of us dont elect them to lead the country.. Our system is designed to elect corrupted ,rogues..and it is automatically designed in a way where our state organisations to run at losses, because appointments made by Ministers and most of them are their lazy followers..

In this way we create lot of inefficiencies in the system and make huge losses

In a move that will further deepen the prevailing fuel crisis, the Lanka Indian Oil Company (LIOC) is reported to be planning to increase fuel prices within the next few weeks if the government fails to remove the special taxes imposed over the years on fuel.

Reliable petroleum sources told Daily Mirror that the LIOC was selling petrol at a loss of Rs.22 on a litre while it was losing Rs.16 on a litre of diesel. “The reason for these losses was because of the special tax of 13% imposed earlier on a litre of fuel. Even the Ceylon Petroleum Corporation has to pay these taxes but that money goes back to the government coffers. So it is not a loss for either the Ceylon Petroleum Corporation (CPC) or the Ceylon Petroleum Storage Terminal Limited (CPSTL) but only to the LIOC,” sources said.

They said LIOC officials recently met Finance Minister Mangala Samaraweera and other top-level government officials and an assurance given when they requested that this tax be removed. “In the event the taxes are not removed as promised, the LIOC Board of Directors will take decision to go ahead with the planned increase. The LIOC cannot sustain itself any longer with the staggering losses it is incurring. Either the government should remove the taxes or increase fuel prices to avert further losses,” a source said.

When asked as to what the increase would be a sources said that he was unable to make any comment because it was the responsibility of the management to decide on any change to the current prices.(Nirmala Kannangara)

Since January 2017, Lanka IOC has incurred a loss of Rs. 964 million mainly due to losses being suffered by the company through the sale of petrol and diesel.

The company had reported a loss of Rs. 652 million for January-March 2017, Rs. 135 million for April-June 2017 and now has reported a loss of Rs. 177 million for the quarter July-September 2017.

The market prices of auto fuels were last revised in January 2015 and since then prices have not been revised in the country. The price of crude oil, which touched a bottom of $ 30/bbl, has now risen to almost $ 62/bbl, but the retail selling prices has remained the same.

Further, during this period, taxes have been further increased but selling prices have not been increased. Above all, oil companies have to bear the burden of exchange loss too due to the depreciation of the Sri Lankan rupee by almost 18%.

The recent surge in the international prices of petroleum products has added to the losses being made by the company. Although the company has performed well in other business segments, since 80% of its turnover is derived from auto fuels, the loss/gain on petrol and diesel finally decides the profitability of the company.

LIOC has repeatedly requested the concerned authorities to either increase the selling prices of auto fuels or reduce the taxes. In petrol, out of a selling price of Rs. 117 per litre, Rs. 57 per litre goes towards taxes apart from other levies. Similarly, in diesel, out of a selling price of Rs. 95 per litre, Rs. 30 per litre goes towards taxes apart from other levies.

LIOC commands a market share of around 16% in auto fuels and the balance is with the Government-controlled entity. As per the sources, based on the prevailing international prices of petroleum products, oil companies in Sri Lanka are losing around Rs. 24 per litre on petrol and Rs. 16 per litre on diesel.

In view of the significant losses being incurred by oil companies and its impact on the Sri Lankan economy, the Sri Lankan Government is contemplating implementation of a pricing formula in the country.

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